BRUSH is a coalition of tenants and tenant associations within the West Harlem and northern Manhattan communities dedicated to preventing unscrupulous real estate barons from trampling on tenants' rights.

Friday, October 14, 2011

Back in 2006, this column revealed that one of the city's fastest-growing owners of rent-regulated apartments had declared war on an astonishing number of its tenants.

Over two years, Pinnacle Group LLC, owner of some 20,000 units - mostly in upper Manhattan, the South Bronx and central Brooklyn - filed 5,000 eviction notices in Housing Court.

At some buildings, such as the historic Dunbar Houses, a 534-unit complex in Harlem, or a 300-unit complex on Morrison Ave. in the South Bronx, Pinnacle tried to evict half the tenants within months of buying the buildings.

In one case after another, the Daily News found evidence the company harassed tenants into leaving, then quickly renovated the units so it could double or triple the rents.

Those stories, along with repeated protests by Pinnacle residents, prompted several investigations by authorities of what housing advocates called "predatory equity buyers" - investment groups that gobbled up rent-stabilized units during the real estate boom to deregulate them.

In 2008, then-Attorney General Andrew Cuomo reached a settlement with Pinnacle, requiring it to pay $1 million in rent overcharges to more than 300 tenants.

By then, tenant leaders had filed a class-action racketeering suit against the firm and its chief executive Joel Wiener. Those tenants were elated when, last year, a federal judge certified the class-action suit to proceed.

Earlier this month, Pinnacle and the firm representing the tenants suddenly announced a proposed settlement. Tenant leaders who spearheaded the suit immediately denounced the deal and are organizing tenants to ask a federal judge to reject it.

"This is a sham settlement," Ted Charron, a lead plaintiff, said. "Pinnacle conspired to harass and cheat tenants out of millions of dollars and our own lawyers turned this into just a rent overcharge case."

Charron and other tenant leaders say Jenner and Block, the firm that represented them pro bono, just didn't want to go to the expense of a full trial.

Richard Levy, the lead lawyer for the tenants, disagreed.

"We could never have done better," Levy said.

Under the deal, Pinnacle agreed to have a court-appointed administrator review all tenant claims of past overcharges, harassment and other rent-law violations and award individual damages with no cap.

The firm agreed to a series of procedures to protect tenant rights and to submit to a two-year period of monitoring.

In addition, Pinnacle would pay $2.5 million into a fund to finance legal representation for those tenants and up to $1.4 million for the tenants' law firm.

"This is a very good settlement," said Ken Fisher, a lawyer for Pinnacle. "You've got a claims administration process that will be done in an expedited process.

"We always said we made mistakes and certainly took responsibilities for those mistakes."

Pinnacle chose to settle the case to avoid spending millions on a drawn-out trial, he added.

"This is a complete whitewash of Pinnacle's responsibilities," said another lead plaintiff, Kim Powell. She is organizing fellow tenants to oppose the deal.

As in so many class-action suits, the biggest winners end up being the lawyers.